Professional Documents
Culture Documents
Sales Memory Aid San Beda PDF
Sales Memory Aid San Beda PDF
113
SALES
SALE 6. Onerous.
A nominate contract whereby one of
the contracting parties obligates * Aleatory contract: one of the parties or
himself to transfer the ownership of both reciprocally bind themselves to give
and to deliver a determinate thing or to do something in consideration of
and the other to pay therefor a price what the other shall give or do upon the
certain in money or its equivalent. happening of an event which is
uncertain, or which is to occur at an
NOTES: Delivery and payment in a indeterminate time. (Ex: Sale of
contract of sale are so interrelated and sweepstakes ticket)
intertwined with each other that without
delivery of the goods there is no Contract to sell
corresponding obligation to pay. The exclusive right and privilege to
two complement each other. It is clear purchase an object.
that the two elements cannot be a bilateral contract whereby the
dissociated, for the contract of purchase prospective seller, while expressly
and sale is essentially a bilateral reserving the ownership of the
contract, as it gives rise to reciprocal subject property despite delivery
obligations. (Pio Barretto Sons, Inc. vs. thereof to the prospective buyer
Compania Maritima, 62 SCRA 167). binds himself to sell the said
Neither is the delivery of the thing property exclusively to the
bought nor the payment of the price prospective buyer upon fulfilment of
necessary for the perfection of the the condition agreed upon, that is,
contract of sale. Being consensual, full payment of the purchase price.
it is perfected by mere consent.
NOTE: Absent a proviso in the contract
Elements: that the title to the property is reserved
a. Essential elements those without in the vendor until full payment of the
which, there can be no valid sale: purchase price or a stipulation giving the
1. Consent or meeting of minds vendor the right to unilaterally rescind
2. A Determinable subject matter the contract the moment the vendee
3. Price certain in money or its fails to pay within the fixed period, the
equivalent transaction is an absolute contract of
b. Natural elements inherent in the sale and not a contract to sell. (Dignos
contract, and which in the absence vs. CA [1988])
of any contrary provision, are * The contract of sale by itself is not a
deemed to exist in the contract: mode of acquiring ownership. The
1. Warranty against eviction contact transfers no real rights; it
2. Warranty against hidden defects merely causes certain obligations to
c. Accidental elements may be arise.
present or absent depending on the
stipulation of the parties (e.g.: Contract of Contract to
conditions, interest, penalty, time Sale Sell
or place of payment, etc.) 1. Title passes to the 1. Ownership is
buyer upon delivery reserved in the
of the thing sold seller and is not to
Characteristics: pass until full
1. Principal payment of the
2. Consensual; purchase price
3. Bilateral; 2. Non-payment of 2. Full payment is a
4. Nominate; the price is a positive suspensive
5. Commutative; In some cases, negative resolutory condition, the
aleatory (emptio spei); condition and the failure of which is
NOTE: the terms C.I.F. and F.O.B. area be greater or lesser, unless
merely make rules of presumption there is gross mistake.
c. C.O.D. (collect on delivery) the NOTE: The Civil Code presumes that the
carrier acts for the seller in purchaser had in mind a particular piece
collecting the purchase price, of land and that he ascertained its area
which the buyer must pay to and quality before the contract of sale
obtain possession of the goods. was perfected. If he did not do so, or if
having done so he made no objection
SELLERS DUTY AFTER DELIVERY TO and consented to the transaction, he can
CARRIER blame no one but himself (Teran vs.
1. To enter on behalf of buyer into such Villanueva Viuda de Riosa 56 Phil 677).
contract reasonable under the What is important is the delivery
circumstances of all the land included in the
2. To give notice to buyer regarding boundaries.
necessity of insuring the goods
DOUBLE SALE (Art. 1544)
PAYMENT OF THE PURCHASE PRICE Requisites: VOCS
GENERAL RULE: The seller is not bound 1. two or more transactions must
to deliver the thing sold unless the constitute valid sales;
purchase price has been paid.
2. they must pertain exactly to the
EXCEPTION: The seller is bound to same object or subject matter;
deliver even if the price has not been
3. they must be bought from the same
paid, if a period of payment has been
or immediate seller; AND
fixed.
4. two or more buyers who are at odds
Sale of Real Property by Unit over the rightful ownership of the
subject matter must represent
Entire area stated in the contract conflicting interests.
must be delivered
When entire area could not be Rules of preference:
delivered, vendee may: 1. Personal Property
1. Enforce the contract with the a. first possessor in good faith
corresponding decrease in price 2. Real Property
2. Rescind the sale: a. first registrant in good faith
a. If the lack in area is at least b. first possessor in good faith
1/10 than that stated or c. person with oldest title in good
stipulated faith
b. If the deficiency in quality
specified in the contract NOTES:
exceeds 1/10 of the price Purchaser in Good Faith one who
agreed upon buys the property of another without
c. If the vendee would not have notice that some other person has a
bought the immovable had right to or interest in such property
he known of its smaller area and pays a full and fair price for the
of inferior quality same at the time of such purchase or
irrespective of the extent of before he has notice of the claim or
lack of area or quality interest of some other person in the
property (Veloso vs. CA).
Sale for a Lump Sum (A Cuerpo Cierto)
Registration requires actual
Vendor is obligated to deliver all the recording; if the property was never
land included within the boundaries, really registered as when the
regardless of whether the real area registrar forgot to do so although he
should be greater or smaller has been handed the document,
Ordinarily, there can be no rescission there is no registration.
or reduction or increase whether the
CONDITION WARRANTY
Effect of Non-fulfillment of Condition a statement or representation made
1. If the obligation of either party by the seller of goods,
is subject to any condition and contemporaneously and as a part of
such condition is not fulfilled, the contract of sale, having
such party may either: reference to the character, quality,
a. refuse to proceed with the or title of the goods, and by which
contract he promises or undertakes to insure
b. proceed with the contract , that certain facts are or shall be as
waiving the performance of he then represents.
the condition.
2. If the condition is in the nature Kinds:
of a promise that it should 1. EXPRESS any affirmation of fact or
happen, the non-performance of any promise by the seller relating to
such condition may be treated the thing if the natural tendency of
by the other party as breach of such affirmation or promise is to
warranty. induce the buyer to purchase the
same and if the buyer purchases the
NOTE: A distinction must be made thing relying thereon
between a condition imposed on the
perfection of a contract and a condition NOTE: A mere expression of opinion, no
imposed merely on the performance of matter how positively asserted, does not
an obligation. The failure to comply with import a warranty unless the seller is an
the first condition would prevent the expert and his opinion was relied upon
juridical relation itself from coming into by the buyer.
existence, while failure to comply with
the second merely gives the option
particular purpose for which it was 1. When two or more animals have been
acquired by the buyer sold at the same time and the
redhibitory defect is in one, or some of
GENERAL RULE: There is no implied them but not in all, the general rule is
warranty as to the quality or fitness for that the redhibition will not affect the
any particular purpose of goods under a others without it. It is immaterial
contract of sale whether the price has been fixed for a
EXCEPTIONS: lump sum for all the animals or for a
1. Where the buyer, expressly or by separate price for each.
implication manifests to the 2. No warranty against hidden defects of
seller the particular purpose for animals sold at fairs or at public
which the goods are required auctions, or of livestock sold as
2. Where the buyer relies upon the condemned. This is based on the
sellers skill or judgment assumption that the defects must have
been clearly known to the buyer.
Warranty of Merchantability 3. Sale of animals shall be void when:
Warranty in which the seller a) animals sold are suffering from
contagious disease
guarantees, where the goods were
b) if the use or service for which
bought by description, that they are
they are acquired has been stated in the
reasonably fit for the general
contract, and they are found to be unfit
purpose for which they are sold
therefor
It requires identity between what is 4. Limitation of the action: 40 days
described in the contract AND what from the date of their delivery to the
is tendered, in the sense that the vendee
latter is of such quality to have some 5. Vendor shall be liable if the animal
value should die within 3 days after its
purchase if the disease which caused the
Instances where implied warranties are death existed at the time of the contract
inapplicable:
1. As is and where is sale - vendor OBLIGATIONS OF THE VENDEE:
makes no warranty as to the quality A. Principal Obligations:
or workable condition of the goods, 1. To accept delivery
and that the vendee takes them in 2. To pay the price of the thing sold in
the condition in which they are legal tender unless another mode has
found and from the place where they been agreed upon
are located. NOTE: A grace period granted the
2. Sale of second-hand articles vendee in case of failure to pay the
3. Sale by virtue of authority in fact or amount/s due is a right not an
law obligation. The grace period must not
be likened to an obligation, the non-
Caveat Venditor (Let the seller payment of which, under Article 1169 of
beware): the vendor is liable to the the Civil Code, would still generally
vendee for any hidden faults or defects require judicial or extra-judicial demand
in the thing sold, even though he was not before default can be said to arise
aware thereof. (Bricktown Devt Corp vs. Amor Tierra
Devt Corp. 57SCRA437)
Caveat Emptor (Let the buyer
beware): requires the purchaser to be B. Other Obligations
aware of the supposed title of the 1. To take care of the goods without
vendor and one who buys without the obligation to return, where the
checking the vendors title takes all the goods are delivered to the buyer and
risks and losses consequent to such he rightfully refuses to accept
failure.
NOTES:
RULES IN CASE OF SALE OF ANIMALS
the goods themselves (Arts. 2247 and mere bailee, and will be liable as
2241). such.
NOTE: The bringing of an action to 3. The carrier should not deliver
recover the purchase price is not one of anymore to the buyer or the latters
the ways of losing the possessory lien. agent; otherwise he will clearly be
An unpaid seller does not lose his lien by liable for damages.
reason that he has obtained a money 4. The carrier must redeliver to, or
judgement or decree for the price of according to the directions of the
goods (Art. 1529, last paragraph). seller.
4. The right must be exercised by the As to matters not provided for by the
debtor within 30 days from the date provisions on barter, the provisions
the assignee demands (judicially or on sales will apply suppletorily
extra-judicially) payment from him
BULK SALES LAW (Act No. 3952)
SALE OF CREDIT OR OTHER When Sale or Transfer in Bulk:
INCORPOREAL RIGHTS IN LITIGATION Any sale, transfer, mortgage, or
GENERAL RULE: Debtor has the right of assignment:
legal redemption in sale of credit or 1. Of a stock of goods, wares,
incorporeal rights in litigation merchandise, provisions, or
EXCEPTIONS: materials otherwise than in the
a. Sale to a co-heir or co-owner ordinary course of trade and the
b. Sale to a co-owner regular prosecution of business; or
c. Sale to the possessor of property 2. Of all or substantially all, of the
in question business or trade; or
3. Of all or substantially all, of the
BARTER fixtures and equipment used in the
business of the vendor, mortgagor,
transferor or assignor (section 2)
BARTER
contract whereby one of the parties When sale or transfer in bulk not
binds himself to give one thing in covered by Bulk Sales Law:
consideration of the other's promise 1. If the sale or transfer is in the
to give another thing (Article 1638) ordinary course of trade and the
regular prosecution of business of
NOTE: Barter is similar to a sale with the vendor;
the only difference that instead of 2. If it is made by one who produces
paying a price in money, another thing is and delivers a written waiver of the
given in lieu of the purchase price provisions of the Bulk Sales Act from
his creditors
PERFECTION and CONSUMMATION 3. If it is made by an executor,
Perfected from the moment there is administrator, receiver, assignee in
a meeting of minds upon the things insolvency, or public officer, acting
promised by each party in under judicial process (Section 8);
consideration of the other and
4. If it refers to properties exempt from
Consummated from the time of attachment or execution (Rules of
mutual delivery by the contracting Court, Rule 39, Section 12)
parties of the things promised
Protection Accorded to Creditors by
NOTES: Bulk Sales Law:
1. It requires the vendor, mortgagor,
Where the giver of the thing transferor or assignor to deliver to
bartered is not the lawful owner the vendee, mortgagee, or to his or
thereof, the aggrieved party cannot its agent or representative a sworn
be compelled to deliver the thing written statement of names and
which he has promised and is also addresses of all creditors to whom
entitled to damages. said vendor, etc. may have been
Where a party is evicted of the thing indebted together with the amount
exchanged, the injured party is given due or to be due (Section 3)
the option, either to recover the 2. It requires the vendor, mortgagor,
property he has given in exchange transferor or assignor, at least 10
with damages or only claim an days before the sale, transfer,
indemnity for damages. mortgage, assignment to make a full
detailed inventory showing the
quantity and the cost of price of
NOTE: Suspend- for the intervening The lessee is obliged to tolerate the
period, the lessee does not have to pay work although it may be very
the rent. annoying to him and although during
the same time he may be deprived
EFFECTIVITY OF THE SUSPENSION: of a part of the premises
The right begins: 1. If repairs last for more than 40 days:
a) In the case of repairs, from the time Lessee cannot act for reduction of
he made the demand for said repairs, rent or rescission
and the demand went unheeded. 2. If 40 days or more: lessee can ask
b) In the case of eviction, from the time for proportionate reduction
the final judgment for eviction becomes NOTE: In either case, rescission may be
effective. availed of if the main purpose is to
provide a dwelling place and the
Alternative remedies of Aggrieved property becomes uninhabitable.
party (Lessor/Lessee) in case of Non-
fulfillment of duties: Effects if Lessor fails to make Urgent
1. Rescission and damages Repairs
2. Damages only, allowing the contract 1. Lessee may order repairs at the
to remain in force Specific lessors cost
Performance 2. Lessee may sue for damages
NOTE: Damages Recoverable in 3. Lessee may suspend the payment of
ejectment cases are the rents or the fair the rent
rental value of the premises. The 4. Lessee may ask for rescission, in case
following cannot be successfully of substantial damage to him
claimed:
1. Profits plaintiff could have TRESPASS IN LEASE:
earned were it not for the 1. Trespass in fact (perturbacion de
possible entry or unlawful mere hecho):
detainer
2. Material injury to the premises
physical enjoyment is reduced
3. Actual, moral, or exemplary Lessor will not be held liable.
damages 2. Trespass in law (perturbacion de
derecho):
Immediate termination of lease under A third person claims legal right
Art. 1660 applies: to enjoy the premises
1. only to dwelling place or any other Lessor will be held liable
building intended for human
habitation NOTE: While the Japanese Occupation
2. even if at the time the contract was was a fortuitous event, the lessor is still
perfected, the lessee knew of the not excused from his obligation to
dangerous condition or waived the warrant peaceful legal possession. Lease
right to rescind on account of this is a contract that calls for prestations
condition both reciprocal and repetitive; and the
Rules on Alteration of the Form of the obligations of either party are not
Lease discharged at any given moment, but
The Lessor can alter provided there must be fulfilled all throughout the term
of the contract. (Villaruel vs. Manila
is no impairment of the use to which
Motor Co.)
the thing is devoted under the terms
of the lease
Duration of Lease
Alteration can also be made by the 1. Lease made for a determinate
Lessee so long as the value of the time or fixed Period
property is not substantially
impaired
Lease will be for the said period
and it ends on the day fixed
without need of a demand
Rules in case of Urgent Repairs
Rule if Lessor Objects to the Lessees which are by nature foreign to the right
continued Possession: of occupancy or enjoyment inherent in a
contract of lease such as an option to
Requisites:
purchase the leased premises (Dizon vs.
1. Contract has expired
Magsaysay GR No. 23399, May 31,1974)
2. Lessee continued enjoying the thing
3. Lessor Objected to this enjoyment
Perpetual Lease
If the three requisites are present,
the lessee shall be considered a
A lease contract providing that the
lessee can stay in the premises for as
possessor in bad faith
long as he wants and for as long as
he can pay the rentals and its b. All residential units in other areas
increases. the total monthly rental for each of
This is not permissible; it is a purely which does not exceed P4,000 as of
potestative condition because it 1/1/02, without prejudice to pre-
leaves the effectivity and enjoyment existing contracts.
of leasehold rights to the sole and
exclusive will of the lessee Grounds for judicial ejectment:
SANORE
NOTE: In Jespajo Realty vs. CA, 27 1. Assignment of lease or subleasing of
Sept. 2002, the SC upheld a lease residential units including the
contract, which provides that the lease acceptance of boarders or
contract shall continue for an indefinite bedspacers without written consent
period provided that the lessee is up-to- of the owner or lessor;
date in the payment of his monthly 2. Arrears in payment of rent for a
rentals for the contract is one with a total of 3 months;
period subject to a resolutory condition. 3. Legitimate needs of the owner or
lessor to repossess for his own use or
PURCHASE OF THE LEASED PROPERTY for the use of any immediate
GENERAL RULE: Purchaser of thing member of his family as a residential
leased can terminate lease. unit, provided:
EXCEPTIONS: a. owner or immediate member not
a. lease is recorded in Registry of being owner of any other available
Property residential unit within the same city
b. there is stipulation in the or municipality;
contract of sale that purchaser b. lease for a definite period has
shall respect the lease expired;
c. purchaser knows the existence of c. lessor has given lessee formal
the lease notice 3 months in advance; and
d. sale is fictitious d. owner or lessor is prohibited
e. sale is made with right of from leasing the residential unit or
repurchase allowing its use by a third person for
at least 1 year.
GROUNDS FOR EJECTMENT UNDER ART. 4. Absolute ownership by the lessee of
1673: (ELVU) another dwelling unit in the same
1. Expiration of the period agreed upon city or municipality which may be
or the period under Arts. 1682 and lawfully used as his residence
1687; provided lessee is with formal notice
2. Lack of payment of the price 3 months in advance;
stipulated; 5. Need of the lessor to make necessary
3. Violation of any of the conditions repairs in the leased premises which
agreed upon in the contract; and is the subject of an existing order of
4. Unauthorized use or service by the condemnation by appropriate
lessee of the thing leased. authorities concerned in order to
make said premises safe and
habitable; and
6. Expiration of period of the lease
RENTAL REFORM ACT OF 2002 contract.
(R.A. No. 9161)
Effectivity: January 1, 2002. NOTE:
Coverage: Except when the lease is for a
definite period, the provisions of
a. All residential units of NCR and other
Art. 1673(1) of the Civil Code (CC),
highly urbanized cities, the total
insofar as they refer to residential
monthly rental for each of which
units, shall be suspended during the
does not exceed P7,500;
effectivity of R.A. 9161, but other
Lease duration:
1. If there is a fixed period, lease will be
for said period.
2. If no fixed period, apply the following
rules:
a. If rent is paid daily: day to day